What Is USDJ (USDJ)?

What Is USDJ (USDJ)? Complete Guide Review About USDJ.

What Is USDJ (USDJ)?

TRON network offers varieties of quality assets, but most of them are not viable for everyday use because of their high volatility. USDJ is a new currency generated through decentralized smart contracts on the TRON network. Anyone can pledge TRX as collateral to generate. The enters into free circulation as any other crypto currency does once generated. It is pegged to the US dollar through Collateralized Debt Positions (CDPs), and also has autonomous feedback mechanisms. Stable coin is a USD-pegged cryptocurrency backed by collateral assets. They believe that will become an integral part of the TRON DeFi ecosystem.

To redeem the collateral, the debt must be repaid with USDJ along with a stability fee paid with JUST platform token, JST. Finally, CDP holders can send a transaction to JUST to retrieve all collateral assets. If a price slump of the collateral makes it at risk of being unable to cover the debt, the CDP liquidation will be triggered to auction the collateral for repayment. Any remaining value net of the debt and the penalty fee will be kept in the CDP for withdrawal.

USDJ Storage Key Points

Coin BasicInformation
Coin NameUSDJ
Short NameUSDJ
Circulating Supply14,848,771.67 USDJ
Total Supply14,848,772
Source CodeClick Here To View Source Code
ExplorersClick Here To View Explorers
Twitter PageClick Here To Visit Twitter Group
WhitepaperClick Here To View
Official Project WebsiteClick Here To Visit Project Website

Price Stability Mechanism

In the event of market instability, a Target Rate Feedback Mechanism (TRFM) will be triggered to maintain the same denomination of USDJ. The Target Rate Feedback Mechanism is a process in which the Stablecoin System helps to adjust the Target Rate, so as to mobilize market forces to maintain the stability of price. The Target Rate determines the change of the Target Price, which incentivizes people to hold when the value is positive and lend when it’s negative. Such a feedback mechanism maintains the market price of around the Target Price, thus dampening the price volatility of and injecting liquidity during demand shocks.

Under the Target Rate Feedback Mechanism, once the market price of USDJ falls below the Target Price, the Target Rate will increase, making it more expensive to generate USDJ with CDPs. In the meantime, an increased Target Rate will drive up the capital gains of holding, thus increasing the demand. In this way, the reduced supply and increased demand will push up the market price of back towards its Target Price. Likewise, when the market price of rises above the Target Price, the same mechanism takes effect by decreasing the Target Rate, and thus driving down the market price back towards the Target Price.

Global Settlement Mechanism

When the USDJ price that the system receives from Oracles deviates drastically from the Dollar during a system attack or malicious control which causes intolerable risks within the system, global settlers designated by JST holders can trigger the Global Settlement Mechanism that is carried out in the following step. After Global Settlement is activated, CDPs can no longer be created or adjusted and the Price Feed will be frozen at a certain value to process all users’ claims. Meanwhile, Keepers in the JUST system will auction the debt and collateral assets based on the fixed Price Feed in a decentralized way in order to process corresponding claims of all and CDP holders.

Risk Management

To effectively manage and control potential risks, USDJ stablecoin system is armed with a comprehensive risk-management system. On one hand, JST holders elect key decision makers through their votes to regulate risks across the system. On the other hand, JST holders may also vote with JST to participate in setting up and modifying the risk parameters. After Keepers process all Global Settlement claims, each and CDP holder can submit a claim request on JUST to directly exchange their or CDPs for a fixed amount of TRX based on the Target Price of USDJ. No time limit is set as for when users can take this step.

Modification of Target Rate

Administrators may change Target Rate. In real practice, when JST holders want to peg the price of USDJ to the current Target Price, they may set Sensitivity Parameter and Target Rate at zero to achieve the goal. JUST platform obtains the internal price of collateral and the market price of USDJ through decentralized Oracles. JST holders can control the number of Oracle nodes and designate specific nodes as trusted Oracles. The system operates safely as long as over half of the Oracles function properly.

Global setter is a crucial mechanism for JUST platform to survive attacks against the Oracles and the governance steps. The mechanism chooses a set of global setters and determines how many global setters are needed to activate a global settlement.

Setting up parameters for risk-control

To maintain the stability of the price of USDJ, the JUST system sets up multiple parameters for risk-control to regulate the Collateralized Debt Positions, all of which will be put up for vote and determined by JST holders. Debt ceiling is the maximum amount of debt that can be created by CDP. Once the debt ceiling is reached, it becomes impossible for CDP to create new USDJ unless existing CDPs are closed.

Stability fee A stability fee is the extra fee charged on users when they pay back the debt after borrowing USDJ from CDPs. The stability fee is priced by repaid only in JST. Once repaid, the JST will be burned and removed from the supply. The price of stability fee regulates the incentive of borrowing, and therefore controls the risk from the supply-and-demand end.